GlobalCorp - An Important Announcement

by Michael C. Ruppert
From The Wilderness
March 10, 2005

Michael C. Ruppert is the author of Crossing the Rubicon, the Decline of the American Empire at the End of the Age of Oil.

(Extracts)

Peak Oil is no longer on the way. It is here. Forget for a moment whether or not global oil production has actually begun (see below) its hopelessly irreversible decline. We will not know that for certain until sometime after it happens. The political fact, however, is that global inertia in response to Peak has driven our species, all of it, past the point of no return. There is no changing course for us. We have committed to a path of bloody destruction that can no longer be postponed or evaded. Energy investment banker Matthew Simmons - long a smoke alarm for Peak Oil - has said repeatedly, "The problem is that the world has no Plan B." Simmons is right.

Seeing clearly that there is no Plan B, it is now also too late to come up with a Plan C or Plan D. What I had hoped to accomplish with Crossing the Rubicon is now a missed opportunity. Yet the map so many of us drew in Rubicon remains astonishingly accurate and unaltered. It may prove to be an indispensable survival tool in and of itself very shortly.
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As the evidence grows stronger that we are at Peak now (or very close to it), there is a distinct correlation between oil price hikes and military budget increases, weapons deployment, warfare and covert operations around the world. Economists don't consider such things so they don't report on them. Their orthodoxy scorns any integrated view of world developments outside their own discipline.
…
Nature does not grant time outs.

THE CIA

I recently had a conversation with someone who spent 17 years in the CIA's Directorate of Operations. Thinking of the purge and power shift that has - over the course of the last nine months - decimated the Central Intelligence Agency (long my Bête Noir) and shifted much of its power to the Pentagon, I asked the following question.

"Look, the agency does many things in many roles from raw intelligence gathering, to economic warfare, to satellite recon, to paramilitary operations requiring cover and deniability, to drug smuggling. But since its inception it was always focused in large part on medium and long-term intelligence gathering and covert operations through the costly, patient, expensive means of placing NOCs (non-official covers) or assets in missions where it might take five, ten or fifteen years to bear fruit. These programs were always centered on "what if" contingencies which inherently implied that multiple outcomes were possible; that there were alternative futures to be influenced and shaped.

"Battlefield intelligence is a different critter. It presupposes that there is nothing more important than the battle that has been joined at this moment. If the battle is not won, there are no future choices. Hence nothing matters other than the war that is being fought today. No Yaltas or Potsdams; no future deep cover moles will be needed.

"Every country in the world is betting everything it has on this one hand knowing that after 2007 or 2008 the game ends. The map of the future after that is unknowable and, to large extent, irrelevant. That's why Rumsfeld has won the battle to control American intelligence operations and why the new National Intelligence Director John Negroponte is getting the job.

"Is that right?"

Without the slightest hesitation the former CIA employee answered, "Yes."

It is the ultimate testimony to the madness of Donald Rumsfeld, Paul Wolfowitz and Dick Cheney that there are no more tomorrows left to fix anything. Since 9/11, and especially since a second presidential election was stolen four months ago, the setting for a real Armageddon has been locked in place. It may well have been for years before that.

GASOLINE PRICES

A recent USA TODAY story, giving us the new word "Petronoia," warned that gasoline prices could jump by 25 cents per gallon within the next few days. That increase, it said, would take $90 million per day out of a consumer economy that relies on profligate spending to sustain already bursting bubbles. How are we getting the money to sustain these bubbles? We are, according to Bill Fleckenstein of MSN, using our houses as ATMs just to keep up, even as the housing bubble has already begun to burst.1 Our paychecks certainly aren't increasing.

OIL PRICES

Oil has topped $54 a barrel. It's gone up more than 25% in less than three months and fifty per cent over the last year; 400% since 1999. This amid strong signs that global oil production may have already peaked, as declines around the world are not being offset by new production. New fields may come online but the respite will be very short-lived. There may be a few "mega" projects (about a six-day supply for the planet in each) which may produce momentary price declines but the trend is irreversible. Official bodies like the International Energy Administration (IEA) are openly wishing that demand growth might slow in 2005, when actual figures already prove this wish utterly fanciful. China's oil demand is expected to grow by 33% this year. Industrialized and developing nations are expanding their economies as fast as possible to generate cash and liquidity as a means of securing more oil.

The vicious cycle is in full swing. And yet, according to economist Andrew McKillop…

We then move on to actual declines in production. For the majority of non-OPEC producers - (in fact nearly all except Russia and some Central Asian producers) rates of decline are stubbornly high, despite vaunted technology improvements…

One of the biggest problems facing the IEA [a UN sponsored agency], the EIA [a US government agency] and a host of analysts and 'experts' who claim that 'high prices cut demand', either directly or through damping oil economic growth, is that this does not happen in the real world. Since early 1999 oil prices have risen about 400%. Oil demand growth in 2004 at nearly 4% was the highest in 25 years. In each year since 1999 world oil demand growth has been higher than the previous year - as prices rise.2

McKillop's analysis, which essentially says that rising oil prices are either good or of no consequence, falls way short for two reasons. Energy investment banker Matt Simmons a year ago in Berlin stated that he saw the actual point at which price would curb demand at around $180 per barrel. The consumers are bearing most of the costs of these increases. Is this the consumers' choice, or is it simply the point beyond which "the American way of life" will become impossible, regardless of how many incremental cuts people accept?

Go ahead; try to choose to use less oil of your own volition. What reductions are available to you are minimal because the world in which you must make your house payments, feed your family, drive to work and pay your bills is leaving you little choice but to consume more and get less for your money. Only at around $180 a barrel will the consumer no longer be able to subsidize the corporate and economic superstructure on his/her shoulders. This is essentially what Simmons was saying.

The poor will be the first to suffer and they will suffer the most. They will be the first to die.

Secondly, McKillop assumes a "trickle down" benefit to consumers from high prices. International capital flows and your own checkbook should be enough to dispel this belief. Need I say more? Didn't we hear enough about trickle-down from Ronald Reagan?

PRODUCTION

Oil industry guru Jan Lundberg - who seems to be getting a lot less air time than he used to - recently wrote the following brilliant assessment for (ironically of all places) Electric Vehicle (EV) Magazine. Lundberg got it right.

The end of abundant, affordable oil is in sight, and the implications are colossal. About now in our hydrocarbon phase of human history, we have pulled out of the Earth approximately half of the available petroleum (crude oil and natural gas). The other half still in the ground is harder to extract and may not - as assumed - fuel the global economy or even provide a transition to another phase…

This means that the next tough oil shortage, even if it is not acknowledged as a post-peak oil extraction phenomenon of diminishing supply, will cripple the globalized economy. Understanding of both the economics and social dynamics of collapse is rare, and even when it is present there is an absence of taking into account the "market factor" in ushering in collapse…

Despite the need to be prepared for imminent, final energy shortage - which could happen now or in several years at the latest - people persist in focusing too much on the likely date of the passing of the peak. It is already clear that the oil industry and OPEC numbers on oil reserves are suspect.

The scenario I foresee is that market-based panic will, within a few days, drive prices up skyward. And as supplies can no longer slake daily world demand of over 80 million barrels a day, the market will become paralyzed at prices too high for the wheels of commerce and even daily living in "advanced" societies. There may be an event that appears to trigger this final energy crash, but the overall cause will be the huge consumption on a finite planet.

The trucks will no longer pull into Wal-Mart. Or Safeway or other food stores. The freighters bringing packaged techno-toys and whatnot from China will have no fuel. There will be fuel in many places, but hoarding and uncertainty will trigger outages, violence and chaos. For only a short time will the police and military be able to maintain order, if at all. The damage that several days' oil shortage and outage will do will soon wreak permanent damage that starts with companies and consumers not paying their bills and not going to work.

After an almost instant depression seizes the modern industrialized world, and nation-states break down, the frantic attempts of people to feed themselves, stay warm and obtain fresh water (pumped presently via petroleum to a great extent), there will be no rescue. Die-off begins. The least petroleum-dependent communities will survive best. These "backward" nations will be emulated by the scrounging survivors of the U.S. and the rest of the "developed" world, as far as local food production will be tried - in a paved-over, toxic landscape by people who have lost touch with the land...

The prospects of mitigating peak oil or avoiding collapse are almost nil. U.S. petroleum demand in 2004 grew at its strongest rate in five years. In December the daily consumption of refined oil was 21 million barrels in the U.S, a quarter of world use. The U.S. leads the industrialized world in population growth, part of a domestic policy to assure more car and oil sales…

… The Earth cannot, as of the world oil peak in extraction, give up ever greater quantities of black gold. Most of the world exporting companies are now reducing extraction rates due to fewer discoveries and depleted fields. Oil production in 18 producer countries has passed its peak and is declining faster than previously thought: at about 1.14 million barrels a day.

"International Energy Agency figures put the total spare capacity of all 11 countries in OPEC at just 330,000 bpd (down from 6 million bpd in 2002). Conventional Saudi spare capacity is zero... An IEA report from August 2004 indicates Saudi Arabia needs up to 800,000 bpd of newly discovered oil each year just to offset declining fields and maintain its current production level." [Al-jazeera] - This can't happen, so watch for the ensuing energy crisis.

The world needs to produce another 2,723,530.2 barrels per day by the end of 2005 just in order to stand still…

Petroleum is the Great Leveler, in the sense of "leveling" or flattening oil civilization. But petroleum will also be the Great Leveler in terms of equalizing everyone: People will go through a final, grasping petroleum grab with whatever funds and connections they have, before the attempt fails for good. Then all people will have no choice but to work together or perish. Until then, we have skewed values: for example, when a kindly old lady drives to a shop and has her charitable concerns, the use of oil makes her a killer of the planet and she is not pursuing a sustainable form of transportation. Meanwhile, a mean old man who scowls at little children who walks to the shop might be a much more valuable citizen in a practical fashion that matters to the world.3

THE MOST EVIL STATEMENT I HAVE EVER HEARD

Detroit News columnist Thomas Bray recently described an interview with two "experts"; authors who come from the corporate/industrial/Neocon camp. The aberration of his thinking is symptomatic of the guilt we all share and the consequences we all seem to be begging for.

"We will never stop craving more," say Huber and Mills, "nor should we ever wish to. Energy is what brings light out of dark, civilization out of disorder, prosperity out of poverty."4

What was the title of the book that Bray was so jazzed about? The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy.

Contrast all of the above with the following February 28 quotation from China's Xinhuanet news agency:

Global demand may average 84 million barrels a day in 2005, while daily production in January was only 83.6 million barrels, according to the International Energy Agency. Oil prices have risen 11 per cent in the past three weeks in New York on growing concern that OPEC and other exporters will fail to keep up with demand this year.5

That all of these factors are forming a perfect storm is now clear.
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ENERGY

* The world's network of crude oil pipelines also is now operating at virtually 100% capacity. For almost all of 2004, the world's tanker system operated at full capacity too. This sparked an unprecedented rise in tanker rates, which added up to $5 to $6 per barrel to the wellhead price of oil in some key long-haul export routes. - Matthew Simmons. Why are no more tankers being built? Because soon there won't be enough oil to ship to cover what it would cost to build them.
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MILITARY AND POLITICAL

* China is already buying and hoarding 60% of the world's commodities: (Oil, Cement, Aluminum, Copper, Zinc, Manganese, Steel, Coal, Gold, Silver, etc.). It has bought so much cement that it has caused a slowdown in US construction. Last year it bought 90% of the world's steel output and shipped it to China - Multiple sources. Why? Because soon there won't be enough fuel for the globalized transport of such heavy things, nor, presumably, for their industrial exploitation. The world may also be at war shortly, further endangering international trade and transport.

* China has begun placing nuclear-capable ballistic missiles on some of its submarines for the first time. - The Washington Times, December 3, 2004.

* Last November a Chinese nuclear submarine intruded deep into Japanese territorial waters and was escorted (chased) by Japanese Navy ships back into international waters. - The Asia Times, Jan. 16, 2005

* A number of stories have reported that Japan is secretly considering the abandonment of its pacifist constitution and - if it so chose - could have nuclear weapons in months, if not weeks. - Multiple sources.

* Venezuelan President Hugo Chavez has traveled to New Delhi, India where he chose to make a public statement that he would cut off Venezuelan oil supplies to the US in the event of any intervention or a US-directed attempt on his life. The Indian government has thus tacitly endorsed the threat. Meanwhile, the US ambassador to Venezuela has imponderably replied that if that happened the US would just go somewhere else to get its oil. [Where? Iran? Canada (which is signing contracts with China)? West Africa? There is no elasticity anywhere.] - Multiple sources.

* Venezuela has sold its (already in decline) San Cristobal oil field to India. - Times of India, March 6, 2005

ECONOMICS

* Federal Reserve Chairman Alan Greenspan told Congress the record U.S. budget deficit is "unsustainable'' and that spending cuts are needed before costs balloon for Social Security and other benefit programs. - Bloomberg, March 2, 2005.

* German Chancellor Gerhard Schroeder has stated that high oil prices are threatening the global economy and that those prices will be one of the most important items on the agenda of the coming G-8 summit. - The Daily Star, March 1, 2005.

* The Bank of International Settlements has made it official: the dollar dump is underway. Since 2001 the number of dollars held by Asian central banks has fallen by 13% and the rate of sell-off is increasing. - Reuters, March 6, 2005.

* OPEC has announced that oil prices could reach $80 per barrel within two years. - Agence France Presse, March 3, 2005.

THE NEW WORLD ORDER

The New World Order is not a monolith; no single group of rich folks sits together in one room debating our planetary future. It is, quite literally, a new order in which world power aggregates along geographic/geologic lines, forcing regions to become players against each other and running roughshod over the nationalist sentiments of their subject populations. …

Take a look at Orwell's 1984 again. It is a wonder how he saw so much. Yet behind all of this realignment, enormous streams of wealth or capital are being expended and - most importantly - transferred behind the scenes. The people controlling that money are not seeing their control dissipate as the nation-states vanish. Money makes its own rules.

Profits were made during the cold war by continuing the controlled escalation of tensions between the superpowers while secretly preventing those tensions from reaching critically dangerous levels. The major players included Armand Hammer, the Rothschilds, the Bushes, Averill Harriman, inter alia.

These people always find ways to eke profits from a system that is in meltdown. They make money on the way up. They make money on the way down. Their appalling justification, their pact with the devil that makes this all possible, is that "As long as we're making money then everything must be OK." This is what the real PTB (Powers That Be) believe. This is the final distilled definition of "the bottom line".

The problem lies in the definition of "The Powers That Be." Most people still think in terms of nation states. I always think in terms of money, even to the point of looking at money (the way it functions now) as the PTB without attachment to a human or national identity.
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In spite of all the warning signs that demand and energy use must be curbed immediately, the only commercial effect of Peak Oil has been to increase consumption as much as possible - so as to get as much "money" as possible, as quickly as possible. This before the instant, possibly only months away, when money - because of a lack of energy - becomes valueless. Solutions that should enable a reduction in oil consumption are only functioning as an insane rationale for using more. The pity of this utterly unnecessary disaster is matched only by the arrogance that created it.

With unmistakable desperation, China, the US, Russia, Europe and the Middle East are fiercely jockeying for a measly 40 billion barrels of Caspian heavy-sour oil instead of the 350 billion we were promised by the major oil companies a decade ago. …

The only way to curb demand is to pull the plug on global economies, starting first with the already partially cannibalized US economy. Our manufacturing has been stolen or given away for "spare parts." So have our savings, our Constitution, our resources, our credit, our credibility, our confidence, our manufacturing base, our jobs; and soon our houses, our personal bank accounts and ultimately our hope. The United States is being liquidated after a fait accompli merger and acquisition.

The bottom line turns out to be the suicide of the human race as mergers and acquisitions lead to the final moment of malignant capitalism: "the last corporation standing."

GlobalCorp becomes Global corpse.

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